Why on earth would AOL CEO Tim Armstrong blame "distressed babies" for cutting back retirement benefits? Perhaps because he has a history of flipping out when it comes to female employees with complicated pregnancies.

What could make Tim Armstrong a worse boss, at this point? Pouring beers on his employees while…
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In 2005, when Armstrong was working as Google's vice president of national sales, a former sales executive named Christina Elwell filed a lawsuit (embedded below) alleging that Armstrong discriminated against her when she was pregnant with quadruplets.

According to the lawsuit, Armstrong promoted Elwell to Google's national sales director of North America in late 2003 and even singled out her contribution to Google going public in 2004. In April 2004, Elwell told Armstrong she was having medical problems with her pregnancy that would prevent her from traveling for a "few weeks," which is when Armstrong fell off the rails.

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He demoted Elwell the same month that she lost two of her unborn children. He told colleagues she was moved to operations because she could not travel, he called her an "HR nightmare" and said he no longer wanted her in the New York office, and eventually fired her over the phone. To inform her about the demotion, "Armstrong showed Elwell an organizational chart from which Elwell's position had been deleted."

Elwell's initial employment contract with Google had a clause about settling disputes through arbitration, so she was forced to dismiss the complaint with prejudice. But the timeline of action in the lawsuit offers a clearer picture of Armstrong's irrational response to pregnant employees:

Elwell offered instead to accept a demotion to the position of Director of East Coast sales, which would allow her to travel by train and car. Armstrong initially agreed to this arrangement, but almost immediately thereafter changed his mind. Armstrong subsequently promoted to the sales position a man whom Elwell herself had recently hired, who had no internet sales experience, and who was less qualified for the position than Elwell.

Update: Dana Goldstein reports that once the case moved to arbitration, Elwell received a settlement that was "fairly financially advantageous":

In 2006 a federal judge moved Elwell's suit into arbitration. Her attorney met with Google's lawyers in 2007 to discuss a possible settlement, but the company's lawyer allegedly responded, "These people are not settlers."

Sources with knowledge of the case say the parties did eventually reach a settlement via arbitration, which was fairly financially advantageous to Elwell, and which the parties are barred from discussing publicly.